Regardless of whether you’re new to trading or a bona fide Fundamentals trader, an understanding of technical analysis is essential. Technical analysis for trading Forex need not be complicated. Leading Forex educator Abe Cofnas presented this seminar to Vantage FX clients, teaching them technical analysis skills so that they could remove the need to rely on indicators. You can view the presentation slides free here!

1. MODULE 2
TUESDAY JULY 23
6PM-9PM
FOREX TECHNICAL
ANALYSIS
PRESENTATION BY ABE COFNAS
Identifying Highly Probable Signals

2. INTRODUCTION

3. WHAT IS TECHNICAL ANALYSIS?
¡ ANALYSIS OF CHARTS
¡ ANALYSIS OF PRICE ACTION

4. WHAT IS GOAL OF TECHNICAL
ANALYSIS?
¡ TO ACCURATELY DESCRIBE THE SHAPE OF MARKET
PATTERNS
¡ TO PROJECT PRICE DIRECTION
¡ TO IDENTIFY HIGHLY PROBABLE TRADING
OPPORTUNITIES

5. WHAT ARE TECHNICAL INDICATORS?
¡ TECHNICAL ANALYSIS INDICATORS ARE
MATHEMATICAL EQUATIONS THAT SUMMARIZE PRICE
ACTION
MOVING AVERAGE
OSCILLATORS
STOCHASTICS

6. WHAT TECHNICAL INDICATORS ARE
USEFUL?
¡ VERY FEW
¡ MOST ARE LAGGING
¡ THE USE OF INDICATORS MAY IMPAIR THE ABILITY OF
THE TRADER TO UNDERSTAND PRICE ACTION ITSELF.

7. WHAT IS THE MOST USEFUL
TECHNICAL INDICATOR?
¡ BOLLINGER OR VOLATILITY BANDS BECAUSE THEY
MAP A PATTERN BASED ON
¡ VOLATILITY WHICH IS AN IMPORTANT ASPECT OF
PRICE ACTION.

8. WHAT ABOUT CANDLESTICKS?
¡ CANDLESTICKS ARE WAYS OF VISUALIZING SHAPE
AND EMOTION IN THE MARKET.
¡ LEARNING CANDLESTICKS OVER TIME IS A WORTHY
GOAL
¡ GETTING STARTED IN TRADING SHOULD BEGIN WITH
PRICE PATTERNS.

9. 2: WHAT ARE PRICE PATTERNS?

10. WHAT ARE PRICE PATTERNS?
¡ PRICE PATTERNS ARE SHAPES THAT PRICES FORM
OVER TIME.
¡ THE SCIENCE OF MORPHOMETRICS
Wikipedia
Morphometric refers to the quantitative analysis
of form, a concept that encompasses size and
shape

11. WHAT ARE PATTERNS?
¡ A Price Pattern is recognizable shape indicating a
persistence in the direction of the underlying
currency pair.
¡ A “Deterministic Oscillation”
¡ A Price Pattern can be for any time duration.
¡ The shorter the time duration- the less stable the
pattern.

12. WHAT IS A SHAPE?
¡ IS A FACE IN A CLOUD A SHAPE?
¡ A SHAPE IS A PATTERN THAT STAYS INTACT
¡ WHEN ROTATES IN ANY DIRECTION
¡ THE QUESTION FOR THE TRADER IS:
▪ DO PRICES HAVE SHAPES?

13. ARE PRICE PATTERNS LEADING OR
LAGGING ?
¡ PRICE PATTERNS ARE NEITHER LEADING OR
LAGGING. THEY ARE PROJECTIONS THAT SUGGEST
BOUNDARIES THAT HAVE BEEN ESTABLISHED.
¡ IF THE PATTERNS ARE ROBUST THEY HAVE
IMPLICATIONS FOR SHAPING THE TRADE.

14. DO PRICE PATTERNS REFLECT MARKET
EMOTIONS?
¡ YES-AND THAT IS A CRITICAL COMPONENT OF THEIR
VALUE
¡ MARKETS CAN IN FACT BE CONSIDERED EMOTIONAL
ENGINES

15. WHEEL OF EMOTIONS

16. WHICH MARKET EMOTIONS DO
PATTERNS REFLECT OR EXPRESS?
¡ EUPHORIA
¡ REGRET
¡ HOPE-EXPECTATION
¡ OPTIMISM
¡ PANIC
¡ CONFIDENCE
¡ HESITATION
¡ FEAR
¡ GREED
¡ ANXIETY
¡ LOVE
¡ SURPRISE
¡ SORRY
¡ JOY
Charles Darwin. The Expression of the
Emotions in Man and Animals. D.
Appleton and Company: New York
(1872).

17. KEY PATTERNS YOU SHOULD KNOW
¡ TREND LINE
¡ RESISTANCE AND SUPPORT LINES
¡ CHANNEL
¡ TRIANGLE
¡ PARABOLA
¡ FIBONACCI
¡ BOLLINGER BANDS
¡ CORRELATION DIVERGENCES

18. TREND LINES
! !

19. THE POWER OF TREND LINES
¡ Trend lines are boundary mapping direction
¡ They are not an indicator
¡ They help identify buy and sell zones.

20. RESISTANCE AND SUPPORT LINES
SUPPORT AND RESISTANCE LINES ARE BOUNDARIES
WHERE THE PRICE STOPS GOING UP OR DOWN.
EVERY PATTERN IS IN A SENSE A SUPPORT OR
RESISTANCE LINE DEPENDING ON THE PERSPECTIVE OF
THE TRADER.

21. CHANNEL PATTERNS
Very Stable “envelopes” of
performance
Sideways, Upward, and
Downward Channels, and
Expanding Channels

22. TRIANGLES

23. CLASSIC HESITATION TRIANGLE

24. PARABOLIC CURVES

25. PARABOLIC CURVES HAVE
PREDICTIVE POWER

26. REVERSALS: PARABOLIC CURVES
¡ WHAT ARE THE BEST PATTERNS THAT PREDICT
REVERSALS

27. BOLLINGER BANDS

28. REVERSALS: DOUBLE BOLLINGER
BAND
¡ AN EXCELLENT MODIFICATION OF BOLLINGER
BANDS IS TO ADD ANOTHER BAND.
¡ STANDARD BAND SETTINGS IS: (20,2)
¡ ADDITIONAL BAND SETTING IS: (13,2.618)

29. EXAMPLE OF DOUBLE BOLLINGER
BAND

30. CORRELATION AND DIVERGENCES
KEEP TRACK OF CORRELATIONS AND DIVERGENCES
FROM CORRELATIONS BETWEEN MARKETS TO HELP
DECIDE DIRECTION.
CORRELATION ANALYSIS ALSO HELPS CREATE A
DIVERSIFIED PORTOLIO BY CHOOSING LEAST
CORRELATED CURRENCIES.

31. CHALLENGE: FIND LEAST
CORRELATED CURRENCIES

32. LATEST CORRELATIONS

33. AUSSIE AND COPPER

34. CAD AND WTI

35. USDJPY AND EURJPY

36. NIKKEI AND YEN

37. SHANGHI COMPOSITE INDEX AND
AUDUSD

38. ADVANCED: RISK REVERSALS AND
SPOT CORRELATIONS

39. FEAR AS A REVERSAL INDICATOR
¡ WHEN MARKETS REACH EXCESSIVE LEVELS OF FEAR
(LOW OR HIGH) IT IS AN INDICATOR OF REVERSAL OF
DIRECTION

40. FIBONACCI PATTERNS

41. FIB REACTION TO GREEK VOTE

42. 3: PRICE SIGNALS
¡ A PRICE SIGNAL IS A PROBE, BREAK, OR FAILURE TO
BREAK A PATTERN.
THEREFORE
THERE ARE ALWAYS TWO LOCATIONS FOR YOUR NEXT
TRADE!

43. PART 2- PRICE SIGNALS
¡ ONCE A PATTERN IS IDENTIFIED A PRICE SIGNAL
BECOMES DETECTABLE.
¡ A PRICE SIGNAL IS A CHANGE IN THE PATTERN.
¡ A PRICE SIGNAL IS A FAILURE TO CHANGE THE
PATTERN.

44. PRICE SIGNAL EXAMPLE

45. PART 3- SHAPING YOUR NEXT TRADE
¡ THERE IS ALWAYS A NEXT TRADE.

46. KEY STEPS IN SHAPING YOUR NEXT
TRADE
1. SELECT UNDERLYING MARKET
2. SELECT DIRECTION
3. FIND ROBUST PATTERN
4. LOCATE BUY ZONE AND SELL ZONE

47. PART 4: OPTIMAL ENTRY AND EXITS
¡ NOW WE CONSIDER WHEN DO WE GET IN AND
WHEN DO WE GET OUT OF A POSITION?
¡ THE BEST CRITERIA TO GET IN IS?
¡ THE BEST CRITERIA TO GET OUT IS?

48. BEST ENTRY CONDITIONS
¡ THE BEST ENTRY IS WHEN A NEW TREND IS BEGINNING
¡ THE BEST ENTRY IS WHEN A BREAK HAS OCCURRED
¡ THE BEST ENTRY IS WHEN A FAILURE TO BREAK HAS
OCCURRED.

49. IDENTIFYING TREND CONDITIONS
¡ TRENDS GET STARTED
¡ TRENDS GET TIRED
¡ TRENDS REVERSE
¡ HOW DO WE KNOW HOW TO SPOT THESE
CONDITIONS?

50. PRICE BREAK FOR OPTIMAL ENTRY

51. PRICE BREAK
DOWNTREND REVERSALS

52. PRICE BREAK UP-TREND REVERSAL

53. MULTIPLE TIME FRAMES AND PRICE
BREAK

54. PRICE BREAK FATIGUE IS A KEY
INDICATOR

55. FLIP FLOP

56. FIBS AND PRICE BREAK

57. EXIT CONDITIONS
¡ WHEN YOUR IN A POSITION, WHEN DO YOU GET
OUT?
¡ WHEN YOU HAVE REACHED YOUR GOALS?
¡ WHEN THERE IS EVIDENCE THAT THERE IS SENTIMENT
AGAINST YOU!

58. RENKO IS A GREAT TOOL TO GET
OUT
¡ RENKO BLOCKS MEASURE CONSECUTIVE CLOSES OF
A PRE-DETERMINED SIZE.
¡ 1 PIP SIZE FOR CURRENCIES IS RECOMMENDED

59. RENKO PROVIDES A MICRO-
DETECTION OF SENTIMENT
¡ EVEN AT 1 PIP LEVELS, PATTERNS EMERGE.
¡ IF THE PATTERN IS FAVORABLE -IT IS CONFIRMING
EVIDENCE TO STAY IN.
¡ IF THE PATTERN IS NOT FAVORABLE –IT IS
CONFIRMING EVIDENCE TO GET OUT.

60. RENKO DETECTS PERSISTANCE OF
BULLISH OR BEARISH SENTIMENT

61. SOME RENKO EXITING STRATEGIES

62. WHEN SHOULD THE TRADER GET
OUT?

63. USING RENKO TO GET OUT

64. RENKO CHALLENGE

65. RENKO RULE OF THREE

66. RENKO AND A 61.8 FIB

67. USE RENKO FOR CONFIRMING
CANDLES

68. PART 6: RISK CONTROL
¡ WHERE DO WE PUT STOPS?
¡ WHERE DO WE PUT LIMITS?
¡ HOW MUCH LEVERAGE IS TOO MUCH?

69. STOP LOCATION
1. WHERE YOUR RISK TARGET TOLERANCE IS REACHED
2. WHERE THERE IS A CONFIRMED CHANGE IN THE
PATTERN
3. OR USE WIDE STOPS AND APPLY BINARIES INSTEAD
OF STOPS

70. PROFIT TARGET LOCATION
1. WHERE YOUR GOAL IS MET
2. WHERE TECHNICAL RESISTANCE OR SUPPORT IS
OCCURING

71. PART 7: TRADER EVOLUTION
THE TRADER SCORECARD
¡ EVOLUTION OF TRADER REQUIRES EXPERIENCIAL
LEARNING
¡ EVERY 10 TRADES CREATES A SIGNATURE OF
PERFORMANCE.

72. TRADER TOOLS
¡ TRADER SCORECARD
¡ TRADER COACHING
¡ TRADER SIGNALS

73. TRADER SCORECARD
¡ PROVIDES NUMEROUS VISUALIZATIONS OF YOUR
TRADING PATTERNS
¡ IDENTIFIES KEY AREAS OF STRENGTHS AND
WEAKNESSES
¡ LEADS TO QUICK PERFORMANCE IMPROVEMENT

74. TRADER SCORECARD

75. THE PROFITABILITY CURVE

76. FOREX COACHING
¡ PERSONAL CUSTOMIZED SKYPE BASED COURSE.

77. FOREX ALERTS
¡ UNIQUE SIGNALS IDENTIFYING TREND REVERSALS!

78. ABE COFNAS
abecofnas@gmail.com
skype: binarytrader1
Thank you